For the first February since the Great Recession, demand for hotels in Miami-Dade County plummeted into the red last year — and not even Presidents’ Day weekend, one of the few annual tourism mega-weekends, could save it.
Art Basel, the other weekend of guaranteed tourism success Miami-Dade counts on every December, couldn’t lend 2016 a hand, either. Room nights sold closed out 0.5 percent lower than the previous year in December, hotel rooms were 4.8 percent less full than the same time the prior year and revenue lagged by almost 10 percent, according to data and analytics firm STR.
With this year’s Presidents’ Day weekend kicking off Thursday, the question lingers: Can the usually blockbuster weekend turn things around early in 2017?
-0.9 percent Year-over-year decrease in room nights sold during February 2016, the first February of decline since 2009
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December marked the fourth straight month of declining hotel taxes, a progressive downturn the likes of which Miami-Dade also hasn’t seen since the recession. Things got so bad that the week ending Dec. 24, room nights sold dropped by 7.2 percent, the lowest dip since early November when Miami-Dade was still in the midst of a Zika epidemic. That week, hotels made a staggering 27.9 percent less in revenue than they did during the same time in 2015.
Coming in on Presidents’ Day weekend, which will feature the Miami International Boat Show in its second year at Miami Marine Stadium Park and Basin on Virginia Key, the Coconut Grove Arts Festival and Art Wynwood, hoteliers and tourism leaders are hoping this weekend helps turn the page on the challenges of 2016.
“The boat show and Art Basel and events like that, while they are one weekend of business, they have an impact for 52 weeks of the year because it showcases Miami,” said Robert Hill, general manager of the InterContinental Miami downtown.
This time last year, key hotel indicators started to trend downward before going double-digit negative during the last days of Presidents’ Day weekend. In 2016, it spelled bad news for the rest of the year, said Scott Berman, Miami-based industry leader for hospitality and leisure at PwC.
First quarter last year was a wake up call. The market did not recover from the malaise of [quarter one] that included a weak Presidents’ week.
Scott Berman, Miami-based industry leader for hospitality and leisure at PwC
“First quarter last year was a wake up call,” Berman said. “The market did not recover from the malaise of [quarter one] that included a weak Presidents’ week.”
And to be sure, hotels in 2016 were destined to see some unfavorable returns. They had to contest with 2,300 new hotel rooms in the market, Brazil’s tanking economy (the country is Miami’s No.1 international market), the rise of the short-term rental industry, a strong U.S. dollar and Zika, which coincidentally started to become a major issue last February.
Gov. Rick Scott declared a Zika-related health emergency in Miami-Dade on Feb. 3, 2016 — exactly one week before last year’s Presidents’ Day weekend.
Now, no new local Zika cases have been reported since December, Brazil is improving, fewer hotels are coming online and the strength of the dollar has relaxed. Signs point to an upswing in 2017.
We’ve turned the corner in early 2017 is what I’m hearing.
Rolando Aedo, chief marketing officer at the Greater Miami Convention & Visitors Bureau
Although still generally negative, hotel numbers in early February were trending up ahead of the weekend. Room nights sold rose from being 4.4 percent under last year in early January to swinging positive the first week of February, at 1.3 percent over 2016. Hotel rooms early this month were 3.1 percent less full than the same time last year, but that’s better than early January when the discrepancy was 8.5 percent.
“We’ve turned the corner in early 2017 is what I’m hearing,” said Rolando Aedo, chief marketing officer at the Greater Miami Convention & Visitors Bureau.
Moving the Boat Show — and the revenue
It’s no coincidence that last year’s challenges during Presidents’ Day weekend also happened the year that its top money-marker, the Miami International Boat Show, moved from the Miami Beach Convention Center, which is being renovated, to a new location at the once-abandoned Marine Stadium.
For one, show organizers couldn’t secure as many contracts as they historically have for blocks of room, which are special rates at area hotels for boat show attendees.
“We are in a transition where we had a lot of Beach hotels to a lot of Miami hotels,” said Ben Wold, the show’s new manager. “We are trying to improve our room blocks in the Miami hotel community.”
With the Boat Show moving locations, the overall compression in Miami Beach was reduced and some boat manufacturers and exhibitors that typically stay on South Beach chose to stay Downtown or in Key Biscayne.
Alex Tonarelli, managing director of Loews Miami Beach
And because downtown hotels typically command lower rates than Beach hotels, the overall revenue from the weekend declines, Aedo said.
“We heard from hotels on the Beach that have lost some of the benefit from the boat show,” Aedo said. “And then heard from some other hotels in downtown and Coconut Grove that have benefited from that.”
The Loews Miami Beach, which was originally built as a hotel for convention center attendees, lost business and the ability to command high rates when the boat show moved, said managing director Alex Tonarelli in a statement.
“Some boat manufacturers and exhibitors that typically stay on South Beach chose to stay downtown or in Key Biscayne,” he said. Tonarelli added that the hotel will still “likely sell out, or fall just short,” this weekend, “which is great considering the event moved to Key Biscayne.”
Still, the new location is a long-term play. Show organizers have a five-year licensing agreement with the Virginia Key venue and expect to stay there — even after the convention center renovation is finished next year.
But committing to a new location came with a number of logistical hurdles last year, too.
Despite months of preparation and set-up, construction work — complicated by the presence of city crews still putting the finishing touches on a newly created event space at the Marine Stadium — wasn’t completed until about an hour before the show opened to paying customers. Electricity had only been turned on 48 hours earlier, and several outages preceded opening day. When the show did finally open, organizers realized they needed to add resources to a vast and complicated transportation plan that already included more than 80 buses and water taxis in order to fluidly get thousands of attendees on and off of Virginia Key.
“It went down to the wire, but it all came through,” Wold said.
Boat show organizers have learned from the challenges of 2016 and are including more boats in the water, an expanded water taxi fleet, a more compact campus, and a new food provider for the 2017 show.
The show’s organizers say they’ve learned from 2016’s challenges, and they’re coming back with more boats in the water, an expanded water taxi fleet, a more compact campus, and a new food provider.
“We have great expectations,” Wold said last week during a media tour of the campus, which is dominated on land by 600,000 square feet of white-canvas tents and on water by a grid of floating docks and exhibit stages in the Marine Stadium Basin.
Despite the challenges, the show was able to gain a 4 percent bump in attendance in 2016, said show operator the National Marine Manufacturers Association.
This year is looking better: E-ticket sales, which make up about 20 percent of total ticket sales, were up 53 percent as of late last week over the same time last year, Wold said.
Brighter outlook for 2017
Annual staple the Coconut Grove Arts Festival did not break its attendance record in 2016 — the outdoor show was just shy of 100,000 visitors. But it tacks that up to the weather.
“Saturday and Sunday were both trending ahead of the previous year,” said Monty Trainer, president of the Coconut Grove Arts and Historical Association. “We would have [surpassed the record] had it not rained on Monday.”
This year, “the hotels have been absolutely packed,” Trainer said and the show looks forward to a successful 54th iteration featuring 380 artists and, among other things, a dog valet, where attendees can leave their dogs with a sitter at the festival, and an attempt to break the arroz con pollo world record with a 4,000-pound chicken and yellow rice dish.
Despite challenges on the hotel side, the Coconut Grove Arts Festival and Art Wynwood reported good attendance in 2016. They are expecting to top last year’s attendance this Presidents’ Day weekend.
Farther north, 6-year-old Art Wynwood is hoping to continue breaking attendance records. Last year, it surpassed 2015 by about 1,000 attendees for a total of 36,000 visitors. The 2017 show will include more than 500 artists from galleries in 18 countries, about the same as in 2016.
The show benefits from coming off the momentum of the massive Art Basel in December and from its own smaller scope, said director Grela Orihuela.
“We endeavor to have a lot of special projects where in December it’s more difficult. In February we can do it more interactive,” Orihuela said.
Among the top draws this year: a special exhibit with work by Shepard Fairey, creator of the Barack Obama “Hope” poster, a paint-by-the-numbers, 20-foot, interactive mural by artist Trey Speegle, and a 20th century Cuban art exhibit from the Coral Gables Museum.
88 percent Hotel room occupancy ahead of Presidents’ Day weekend
The lineups at all three events portend a good turnout: According to a survey the tourism bureau conducts ahead of the weekend, hotels are about 88 percent booked as of early this week for Presidents’ Day weekend and several hotels are anticipating sellouts, Aedo said.
Ultimately, 2017 isn’t expected to suffer as much as 2016, he said, but the growth will be nominal. The industry is still feeling the long-term effects of canceled group business due to Zika, among other factors.
“We are going to start seeing momentum pick up in the latter part of 2017,” Aedo said.
As for Zika returning? “We are cautiously optimistic,” he said.
Miami Herald writer Douglas Hanks contributed to this report.
If you go
Art Wynwood: For art lovers that want to peruse iconic works of modern art as well as special installations, Art Wynwood is the ticket. The five-day fair, kicking off Thursday, offers work from 60 international exhibitors by more than 500 artists.
Details: 3001 NE 1st Ave., Miami. 6-10 p.m. on Feb. 16 (premier day), 11 a.m.-7 p.m. Feb. 17 to Feb. 19, 11 a.m.-6 p.m. on Feb. 20. $25 for a one-day pass; $15 for students 12-18 years old and seniors 62 and older; free for kids under 12 and accompanied by adult. www.artwynwood.com.
Coconut Grove Arts Festival: More than 100,000 art lovers will flock to this festival that stretches over nearly a mile of historic Coconut Grove to check out the works of 360 globally recognized artists, starting with this year’s creator of the festival poster, Guy Harvey. There’s great live music, too, including Bobby Lee Rodgers, Locos por Juana, Roosevelt Collier’s All-Star Jam, Suenalo, Arthur Hanlon and SunGhosts. Foodies will want to stop by the Culinary Pavilion, where celebrity chefs will give cooking demonstrations each day. There’s even a special place just for kids with all kinds of fun activities.
Details: Adjacent to Biscayne Bay along McFarlane Road, South Bayshore Drive and Pan American Drive. Feb. 18-Feb. 20 from 10 a.m.-6 p.m. $15 general admission per person per day. www.cgaf.com.
Progressive Insurance Miami International Boat Show & Strictly Sail Miami: Boat lovers, there’s no other place you’d rather be over Presidents’ Day Weekend. Check out more than 1,300 boats on land and in the water with 550+ slips; plus exhibits offering marine accessories, electronics, engines, nautical gifts and apparel and services; on-the- water boating workshops, daily seminars, and fun ways to test the waters including paddle sports demos; and great food, with several restaurants on-site.
Details: Miami Marine Stadium Park and Basin, 3501 Rickenbacker Causeway, Miami; 10 a.m.-6 p.m. on Feb. 16 (Premier Day), 10 a.m.-6 p.m. Feb. 17 to Feb. 20. Strictly Sail at Miamarina at Bayside, 401 Biscayne Blvd, Miami; 10 a.m.-6 p.m. Feb. 16 to Feb. 20. $25 one-day pass, $45 two-pass (Feb. 17 to Feb. 20), $100 five-day pass, $40 Premier Day pass; free for kids 15 and under accompanied by adult. MiamiBoatShow.com.
Yachts Miami Beach: Big splurgers should check out the luxury selection at the 29th iteration of Yackts Miami Beach. The in-water-only covers more than 1.2 million square feet of space with 500 new and brokerage yachts, valued at a combined $1 billion.
Details: Indian Creek Waterway along Collins Avenue from 41st to 51st streets, Miami Beach. 10 a.m.- 6 p.m. Feb. 16 to Feb. 19, 10 a.m. to 5 p.m. on Feb. 20. General admission is $20. showmanagement.com/miami_boat_show/event/